HomeMarket NewsThe Ripple Effect of Accenture's Stock Decline

The Ripple Effect of Accenture’s Stock Decline

Actionable Trade Ideas

always free

ACN 0

A Close Look at Second Quarter Fiscal 2024 Results

Accenture Plcย ACN faced challenging terrain today, showcasing second-quarter fiscal 2024 sales that missed the mark at $15.80 billion versus analystsโ€™ anticipated $15.84 billion. The sales clung unyieldingly to last year, neither advancing nor receding in both U.S. dollars and local currency.

The numbers, a mere hairโ€™s breadth above the $15.40 billion โ€“ $16.00 billion projection range, were tinged with promise. Adjusted EPS at $2.77 carved a path to triumph over the predicted $2.66, further bolstering the murky landscape.

In a tale as old as time, revenues for the quarter carried a 0.5% foreign exchange burden, mirroring the dark cloud that hung overhead in the previous quarterโ€™s earnings saga.

New bookings offered a glimmer of hope, standing at $21.6 billion. Split between consultingโ€™s $10.5 billion and managed servicesโ€™ $11.1 billion, the tale of two cities painted a contrasting picture in the companyโ€™s financial landscape.

Adjusted operating income languished at $2.16 billion, a slight regression standing at 13.7% of revenues, a hairโ€™s breadth beneath the 13.8% reported in the same quarter of fiscal 2023.

The Varying Terrain of Revenue Streams

The marketโ€™s melody played out as diverse revenue streams showcased a mixed performance. Products maneuvered a 1% uptick to $4.76 billion in U.S. dollars, holding its ground in local currency. Health & Public Service reveled in a 10% uptick to $3.33 billion, a pleasing sight for sore eyes.

A different tune reverberated in the Financial Services sector, clocking in at $2.81 billion, down by 6% in both U.S. dollars and local currency. Resources, however, painted a brighter picture at $2.24 billion, boasting a 3% jump in U.S. dollars and 4% in local currency.

Communications, Media & Technology carved their path through the market at $2.65 billion, showcasing a decrease of 8% in U.S. dollars and 7% in local currency. The industryโ€™s churning tides reflected a turbulent journey that investors sought to weather in anticipation of calmer seas.

Outlook and Beyond

Peering into the crystal ball for Q3 FY24, Accenture anticipated revenues of $16.25 billion โ€“ $16.85 billion, dancing to the beat of negative (1)% to positive 3% in local currency. A shadow of a negative (1)% foreign-exchange impact loomed on the horizon compared to the third quarter of fiscal 2023. The companyโ€™s adjusted EPS expectation of $11.97 โ€“ $12.20 painted a cautious picture, hinting at a potential struggle ahead in the battle to exceed the consensus of $12.24.

As the fiscal 2024 journey unfolds, Accentureโ€™s revenue growth projections remained anchored at 1% โ€“ 3% in local currency, stepping back from the earlier anticipated range of 2% โ€“ 5%. Operating cash flow continued its march along a well-tread path, projected to stand between $9.3 billion โ€“ $9.9 billion, with free cash flow following suit at $8.7 billion โ€“ $9.3 billion.

Stock Market Rollercoaster

In the past 12 months, the stock soared by 35%, a rollercoaster of an adventure for investors. For those looking to dip their toes in the Accenture waters, the ETC 6 Meridian Quality Growth ETFย SXQG andย Exchange Listed Funds Trust Bancreek U.S. Large Cap ETFย BCUS offered enticing gateways into the stockโ€™s tumultuous journey.

Price Action:ย ACN shares stumbled today by 8.75% to land at $347.14 on the closing bell. A stark contrast to the soaring heights of yesteryears, todayโ€™s market dance left many questioning the future of Accentureโ€™s once steadfast ascent.

Photo via Wikimedia Commons

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.